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- Bitcoin’s correction looks like a bump in a bigger bullish ride, with no sell signals and signs of a strong rebound ahead.
- Liquidity expansion, including M2 supply growth, historically precedes Bitcoin rallies, hinting at a possible surge ahead.
- Investor sentiment and historical cycles show Bitcoin steadily trending upward, reinforced by key technical and macro indicators.
According to analyst Axel, the Bitcoin market is currently experiencing a correction within a broader bullish cycle. Despite two instances of overheating, no sell signals have appeared. The market remains in a key zone, showing potential for a rebound. Macro recovery, Federal Reserve policies, and political developments may drive a fresh rally. Axel Adler Jr.’s Bitcoin Investor Price Model suggests that Bitcoin is still in an uptrend. Key indicators, including Realized Cap, Thermo Cap, and BTC Supply, confirm this outlook.
Bitcoin’s Market Cycle: Key Observations
Bitcoin’s historical price movements indicate defined cycles of rallies and corrections. In 2017 and 2021, Bitcoin surged to the sell level, triggering corrections. In 2022, it neared the buy level, marking a bottom before recovery. By 2023, Bitcoin climbed above the Investor Price Median, signaling renewed market optimism.
In early 2024, Bitcoin approached the Hype Line, suggesting increasing bullish sentiment. A Hype Alert emerged, yet no sell signals followed. The Investor Price and Buy Level have consistently trended upward, reinforcing Bitcoin’s long-term growth. These trends reflect broader market psychology and investor sentiment.
Liquidity Trends and Bitcoin’s Correlation
Besides technical indicators, M2 money supply a measure of liquid assets, is a key factor in market momentum. Historically, Bitcoin reacts to shifts in liquidity with a 70-day lag. Recently, the M2 supply rebounded ahead of Bitcoin, suggesting a potential price surge. As M2 has fully recovered, Bitcoin may follow a similar trajectory. Analysts believe this rally could surpass previous ones, driven by liquidity expansion and increasing institutional interest.
Between February and April 2024, Bitcoin and M2 showed synchronized growth. However, a mid-year correction in Bitcoin was followed by stabilization in M2. By late 2024, as liquidity increased sharply, Bitcoin’s price surged again. Early 2025 saw volatility, yet Bitcoin remained aligned with liquidity trends.
